SOCIETE GENERALE Deep Dive into French Retail Banking and Global Banking and Investor Solutions
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SOCIETE GENERALE Deep Dive into French Retail Banking and | 07.05.2019 Global Banking and Investor Solutions
AGENDA 8h30-9h00
9h00-9h45
Introduction
Deep dive into
French retail banking
9h45-10h15 Q&A session
10h15-10h30 Coffee break
10h30-11h15 Deep dive into Global Banking and
Investor Solutions
11h15-11h45 Q&A session
OUR MODEL EXPERTISE AND INNOVATION
FOR OUR CLIENTS
FOCUSING ON OUR OUR DNA: EXPERTISE &
CLIENTS INNOVATION
_ Expertise
B2C Advisory to accompany retail clients
COMMITTED TO
POSITIVE in their key projects
TRANSFORMATIONS Structured and Asset Based Finance
Mobility, Africa, Positive Investment solutions
Impact finance _ At the forefront of innovation
(Boursorama, ALD, cross asset
RESPONSIBLE approach, renewable energies
B2B & BANKING financing… )
B2B2C
HIGHLY SYNERGETIC MODEL
ca. 1/3 of Group revenues from synergies
DEEP DIVE 7 MAY 2019 3
OUR MODEL INTEGRATED REGIONS FOR OUR
CLIENTS
AMERICAS
WESTERN CEE RUSSIA
~6%
EUROPE
~11% ~3%
~68%
ASIA - OCEANIA AFRICA
~6% ~6%
%
% of 2018 Group revenues
LEADERSHIP positions in Western Reference bank in HIGH POTENTIAL RETAIL
Presence in SELECTED WHOLESALE
Europe MARKETS
MARKETS for our core clients
A reference RETAIL BANK in Leveraging on GROUP PRESENCE for our corporate
CONNECTING WITH EUROPE
France clients
DEEP DIVE 7 MAY 2019 4
A REFERENCE BANK WITH A PROFITABLE MODEL IN
FRENCH RETAIL BANKING
NETWORKS BOURSORAMA
Digitalise day-to-day banking & leverage our expertise to Undisputed leader in online banking in
CAGR2015-2018
improve our client experience France
# of clients
Targeting >3M clients by 2021 +30%
Enhanced efficiency of the model thanks to the
transformation underway On the road to profitability
2020 RONE: 11.5% - 12.5%
DEEP DIVE 7 MAY 2019 5
GLOBAL BANKING & INVESTOR SOLUTIONS: A RELATIONSHIP,
PIONEER AND RESPONSIBLE BANK
BY FURTHER LEVERAGING ON OUR
PROVIDE THE BEST CLIENT
INNOVATIVE APPROACH
EXPERIENCE WITH THE BEST PRODUCT
Partnerships (ABSA, DBS…)
Open architecture
Developing investment & financing solutions for institutions and
high net worth clients Coverage
B2B market place strategy
Further strengthening leadership in structured and asset finance
for Corporates AND SUPPORTED BY ADJUSTMENT OF
CAPITAL ALLOCATION CONSISTENT WITH
Developing transaction banking OUR STRATEGIC FOCUS
2020 RONE: 11.5% - 12.5%
DEEP DIVE 7 MAY 2019 6
FURTHER STRENGTHENING OUR GROWTH PLATFORM IN
INTERNATIONAL RETAIL BANKING
LEVERAGE ON FAVOURABLE MARKET DYNAMICS
Positive tailwind in Central Europe and Russia | Strong momentum in Consumer Finance | Strong long term outlook in Africa
STRENGTHEN FURTHER IMPROVE
COMMERCIAL PLATFORMS OPERATIONAL EFFICIENCY
State-of-the-art digital improving client experience Refocus central organization of IBFS
in retail banking Switch to agile and integratedorganisation
Best-in-class integrated POS tools & market place Creation of regional hubs and support local IT in
for car dealers & e-commerce Africa and Russia
Further improve strict risk management
Differentiated & integrated offer for Corporates
IBFS 2020 RONE: 17% - 18%
DEEP DIVE 7 MAY 2019 7
FURTHER INVESTING IN OUR HIGH-GROWTH STORY IN
INSURANCE AND FINANCIAL SERVICES TO CORPORATE
EQUIPMENT
INSURANCE ALD
FINANCE
Integrated Bancassurance model to Leader in mobility Leader partner for international
capture synergies Pioneer in partnership model vendors at the heart of the financing of
Partnership to accelerate growth Private lease real economy
#5 Bankinsurance in France # 1 Full service leasing in Europe # 1 in Europe
EUR 2.3bn of synergies revenues in 2018 # 2 Worldwide # 2 Worldwide
(+13% CAGR2016-2018) 1.7 million cars (+10.5% CAGR2013-2018) EUR 28.4bn outstandings*
*Group leasing outstandings as of end of March 2019 IBFS 2020 RONE: 17% - 18%
DEEP DIVE 7 MAY 2019 8
STRONG RISK PROFILE AND CULTURE
WELL MANAGED CONTAINED A STRICT FOCUS ON
CREDIT RISK MARKET RISK OPERATIONAL RISK
HIGH ORIGINATION AND PORTFOLIO QUALITY MARKET RISK CONTINUOUS INVESTMENT IN
~5% of total RWA since 2016 COMPLIANCE
WELL-ESTABLISHED TRACK RECORD OF LOW
COST OF RISK
HIGHLY DISCIPLINED APPROACH TO RISK TRANSVERSAL CULTURE &
ca. 25 bps on average since 2016 APPETITE
CONDUCT PROGRAMME
KEEPING NPL AT A LOW LEVEL VaR*
EXECUTING OUR ROADMAP TO PROFITABILITY
COST OF RISK
GROWING REVENUES COST DISCIPLINE
MONITORING
Fully LEVERAGING OUR Taking advantage of DIGITAL COMFORT in cost of risk trajectory
EMERGING MARKET PRESENCE TRANSFORMATION in all
Working on GROWTH
businesses
Transforming our model, leveraging on digital, in 2020 ROTE
INITIATIVES in more mature
markets
French retail banking
Supporting growth & transformation in
International Retail Banking & Financial Services
9% - 10%
Leveraging on SG markets platform in Global
Banking & Investor Solutions
Revenue objectives taking into
account CURRENT Delivering EUR 1.6bn EFFICIENCY
ENVIRONMENT PLAN
DELIVERING POSITIVE JAWS ACROSS
ALL BUSINESSES BY 2020 AND BEYOND
DEEP DIVE 7 MAY 2019 10DELIVERING OUR ROADMAP TO CAPITAL TARGET
CLOSE
RWA REDUCTION & REFOCUSING ON
MONITORING OF
OPTIMISATION CORE FRANCHISES
ORGANIC GROWTH
+2% CAGR 2018-2020 ca. +25bp from Global Target +80/+90bp by
organic growth of RWA Markets RWA reduction in 2020
2019-2020
ca. +10bp/+20bp optimization
2020 CET 1
in 2019-2020
12%
DISCIPLINED AND SELECTIVE CAPITAL ALLOCATION
RWA CAGR 2018-2020 constant scope and currency which excludes all model reviews (e.g. TRIM) and IFRS 16
ca. +5% ca. +4% ca. +1%/+2% ca. +0.5%/+1% RWA organic
Wealth & Asset Global Markets & Group growth offset
Management Investor Services
by
deleveraging
International Financial Financing & French Retail & optimisation
Retail Banking Services Advisory Banking ca. -2%
ca. -9%
DEEP DIVE 7 MAY 2019 11COMMITTED TO POSITIVE TRANSFORMATIONS
TAKING FULL
ADVANTAGE OF
FULLY DIGITALISING THE BUILDING GROWTH
DIFFERENTIATING
BANK FOR A BETTER MODELS, TAILORED TO
POSITIONING IN HIGH
CLIENT EXPERIENCE THE FUTURE OF BANKING
GROWTH POTENTIAL
REGIONS
LEADER IN RESPONSIBLE AND INNOVATIVE BANKING
DEEP DIVE 7 MAY 2019 12DEEP DIVE INTO FRENCH RETAIL BANKING
AN ATTRACTIVE FRENCH RETAIL MARKET
DYNAMIC FRENCH RETAIL MARKET STRUCTURAL CHANGES UNDERWAY
GDP / capita: USD 42,470
Above European Average
CHANGING CLIENT
NEW ENTRANTS
EXPECTATIONS
2019e GDP growth
+ 1.3%
INCREASING RATE ENVIRONMENT
REGULATION LOW FOR LONG
Household financial savings: EUR 5,117 bn
HIGHLY COMPETITIVE PREDOMINANCE OF
SITUATION IN FRANCE RELATIONSHIP MODEL
French population: CAGR18-24 +0.6%
Source : IMF , Banque de France
DEEP DIVE 7 MAY 2019 14SOCIETE GENERALE: A HIGH POTENTIAL CLIENT BASE
SPLIT OF FRENCH RETAIL BANKING REVENUES
ca. EUR 8 bn
Revenues
Large
corporates Others
>EUR 3 bn
Fees & Commissions
Medium sized Small sized
businesses businesses
Wealthy / Mass
ca. EUR 159 bn
affluent Affluent Wealthy and Mass affluent Assets Under Management(1)
ca. EUR 1.9 bn
Professionals
Insurance Revenues
Professionals Private life Mass market
Based on 2018 data
(1) As of March 2019
DEEP DIVE 7 MAY 2019 153 COMPLEMENTARY BRANDS ADDRESSING OUR CLIENTS
EXPECTATIONS
3 COMPLEMENTARY THE LEADING FULL
BRANDS WITH UNIVERSAL BANK REGIONAL BANKS
ONLINE BANK
DIFFERENT CLIENT
BASES
Focus on premium clients looking for the highest quality of service Digital & autonomous
clients
Leveraging on a strong Individual clients
Highly recognised
established client base 38 years old on average,
professional franchise
~1% of common clients Focus on wealthy clients mainly city dwellers
High penetration on local
between CDN and SG Strong on nationwide SMEs
SMEs and Entrepreneurs
ca. 15% of Boursorama and large corporates
clients are CDN or SG
clients PHYGITAL MODEL FULLY DIGITAL
2018 REVENUES Individuals Professionals Corporate
DEEP DIVE 7 MAY 2019 16LEVERAGING ON MUTUALISATIONS
BANKING PAYMENT PLATFORM (TRANSACTIS)
AGGREGATION AND ONLINE CAPABILITIES
BEST PRACTICES AND INNOVATIONS SPREAD ACROSS THE BRANDS
IT SYSTEMS AND INFRASTRUCTURE LARGELY SHARED
DATA HUB
60% of Run investments mutualized DIGITAL PROCESS HUB
85% of Infrastructure mutualised
>80% of Digital Hubs mutualised: Exchange Hub, BUSINESS PLATFORM HUB
EXCHANGE HUB
Process Hub, Data Hub and Business Platform Hub
COMPLIANCE, RISK, FINANCE
ORGANISED IN « STREAMS »
DEEP DIVE 7 MAY 2019 17EXPANDING OUR REACH
Clients and services
DEVELOP « NEW TERRITORIES »
CROSS SELL / UP SELL
(B-to-B-to-C / BANK AS A SERVICE)
Target
DEVELOP PARTNERSHIPS (BANK AS A PLATFORM)
KEEP INNOVATING
BIOMETRIC CARD, BIOMETRIC RELATIONSHIP, SYNOE,
CHATBOT, GOOGLE HOME, APPLE / SAMSUNG PAY,
INSTANT PAYMENT, INTERNAL START UP CALL…
OFFER
ACQUIRE NEW CLIENTS
CAPITALISE ON GROUP EXPERTISE
PAYMENT WEALTHY CLIENTS
+6% VS. 2015
SAVINGS ALD, SG Factoring, PROFESSIONALS & CORPORATES
LOANS Insurance, Private
Banking, Investment +5% VS. 2015
PRIVATE BANKING BOURSORAMA
Banking, Transaction
BANK INSURANCE banking… +30% CAGR 2015-2018
REAL ESTATE >3M CLIENTS IN 2021
OTHER : CAR FINANCE, LEASING…
Existing
CLIENT BASE Target
DEEP DIVE 7 MAY 2019 18ADAPTING OUR MODEL
Improve client experience and reduce cost to serve
STANDARD OPERATIONS CUSTOMERS’ KEY PROJECTS
FULLY AUTOMATED ADVISORY
5 LEVERS
FULLY AUTOMATED LEVERAGE ON DATA EXPERTISE & SET UP ADJUSTMENT
APPLI for Selfcare (day-to-day
banking)
AND IA SPECIALISATION Specialised set up for corporates
& professionals
Increase in revenues Training of account
Transfers, online payments, cards,
budget management
Data Marketing for cross-selling and up managers and back-office ~30 business centers /
selling staff
40 features in 2020 (from 17 in 2016) ~150 pro branches & corners
Real time rebound
Fight against fraud in real-time
1 million hours in 2019 in SG Fewer, more adapted branches
Purchase of products and services networks
with electronic signature Automatic decisions on simple
overdraft New dedicated experts for core clients # Branches 2015-2020 ca. –22% in SG
Client Journey digitalisation
Main front-to-back banking processes:
Professionals, Wealthy clients, Liberal
professions network, -9% in CDN network
Account opening, Consumer Credit, Leveraging on call centers
Optimised managerial practices
Mortgage, Corporatecredit… Transforming back-offices
Expert platforms, 6 back offices closed
between 2016 and 2020
DIGITALISED AND DATA CENTRIC IT SYSTEM
DEEP DIVE 7 MAY 2019 19REVENUE GENERATION SUPPORTED BY BUSINESS
INITIATIVES
NET INTEREST MARGIN NORMALISING FOCUS ON FEES GENERATION
DEPOSIT MARGIN DEPOSIT MARGIN FEES DRIVEN BY REVENUE INITIATIVES
EVOLUTION
impacted by negative replacement FRENCH PRIVATE LIFE INSURANCE
BANKING FEES OUTSTANDINGS
rate but progressively normalising 0,0%
Q1 18 Q3 18 Q1 19
CREDIT MARGIN +4%
YoY evolution +14%
Developing with a selective -5,0%
origination strategy
-10,0%
A SUCCESSFUL SELECTIVE ORIGINATION STRATEGY
2016 2018 2016 Mar 19
5%
2018 REVENUES* / LOAN OUTSTANDINGS IN
INSURANCE PENETRATION
FRENCH RETAIL BANKING
4%
P&C Personal Protection
3% 9,4%
17,7% 18,9%
8,2%
2%
1%
0%
2016 2018 2016 2018
Société Générale Bank 1 Bank 2 Bank 3 Bank 4 Bank 5
Source : Companies on published data
* Revenues Ex PEL / CEL as published
DEEP DIVE 7 MAY 2019 20INVESTING IN TRANSFORMATION
OPERATING EXPENSES
TREND
o.w Boursorama
c50% of the investment
2018 2019 2020
TRANSFORMATION COSTS fully supported by the business
Well engaged in TRANSFORMATION OF THE NETWORKS
Delivering COST SAVINGS according to the plan
Cost savings partly offset by INVESTMENTS IN TRANSFORMATION AND GROWTH and REGULATORY & TAX
COSTS
DEEP DIVE 7 MAY 2019 21PROFITABLE FRANCHISES IN FRENCH RETAIL BANKING
2018, in EUR m
FRENCH RETAIL BOURSORAMA
NETWORKS
BANKING FRANCE
REVENUES ex PEL/CEL 7,838 7,673 153
Excluding commercial offers 220
OPERATING EXPENSES -5,629 -5,429 -190
COST OF RISK -489 -474 -16
NET INCOME 1,237 1,271 -35
RONE EXCLUDING INVESTMENT
IN CLIENT ACQUISITION*
RONE 11.0% 11.6% >14%
* Acquisition costs : commercial offers (in revenues) and direct acquisition costs (in costs). On Boursorama France perimeter and with standard method
Boursorama France : excluding Germany and Spain effects
DEEP DIVE 7 MAY 2019 22DELIVERING A PROFITABLE RETAIL BANKING MODEL
PROGRESSIVE REVENUE IMPROVEMENT, OPERATING EXPENSES:
IN THE CURRENT RATE ENVIRONMENT FULLY BENEFITING FROM THE TRANSFORMATION
2019 2020 2019 2020
0% to -1% Increasing revenues +1% to +2% Decreasing cost base
vs. 2018 vs. 2019 vs. 2018 vs. 2019
POSITIVE JAW EFFECT FROM 2020 AND BEYOND
COST OF RISK BETWEEN 35BP AND 40BP IN 2020
2020 RONE 11.5% - 12.5%
DEEP DIVE 7 MAY 2019 23SOCIETE GENERALE NETWORK
A REFERENCE BANK FOR FRENCH CORPORATES
NEEDS
expertise, availability, tailor-made solutions,
beyond the traditional banking needs Trading
Investment
ALD
Banking
LEVERAGING ON SG EXPERTISE
Trade finance, Structured finance, LBO, M&A…
ADAPTED SET UP Specific set up for large
PROXIMITY AND EXPERTISE corporates Private
Factoring
Target 30 business centres by 2020, 9 already rolled out Banking
FOCUS ON GROWTH POTENTIAL Target 30
Start-up offer aiming at supporting 500 companies by
2020 Business centres
Transaction
Sogelease
Important player in « Grand Paris» project financing Banking
Insurance Real Estate
DEEP DIVE 7 MAY 2019 25LEVERAGE ON EXPERTISE FOR
WEALTHY & MASS AFFLUENT CLIENTS
NEEDS
ADVISORY FOR KEY PROJECTS
ca. 489,000 CLIENTS
DIFFERENTIATED PRIVATE BANKING VALUE PROPOSITION FOR
ca. EUR 127 bnAuM | Accretive ROE
FRENCH WEALTHY CLIENTS THROUGH THE CONTINUUM CREDIT
/ ADVISORY, LEVERAGINGON A DEDICATED SETUP
Cumulated net inflows ca. EUR 10bn since 2014
FRENCH WEALTHY CLIENTS
Clients’ AuM > EUR 500k ca. EUR 58 bn AuM
EXTENDING OUR EXPERTISETO FRENCH MASS AFFLUENT
CLIENTS
Reshaping coverage of mass affluent clients leveraging on
FRENCH MASS AFFLUENT CLIENTS private bankingexpertise
Clients’ AuM > EUR 150k ca. EUR 69 bn AuM Dedicated omnichannel setup
Data including 100% of French private banking as of March 2019
Including only Société Générale network
DEEP DIVE 7 MAY 2019 26DIGITALISE DAY-TO-DAY BANKING
NEEDS
SIMPLE AND EFFICIENT DAY-TO-DAY OPERATIONS
DAILY BANKING 100% ONLINE AND STANDARD OFFER 100% DEMATERIALISED BY 2020
MORE AND MORE FUNCTIONNALITIES AVAILABLE x10 DIGITALLY SIGNED CONTRACTS(1)
THROUGH THE APP
. Onboarding MOBILE
. Credit card / account & budget management USE IN 2 ~70%
. Consumerloans YEARS ~70%
. Car & home insurance
. Protection insurance +30% ~30%
~25% ~27%
~13%
. AT THE FOREFRONT OF INNOVATION ON
PAYMENT METHODS 2016 2019 2016 2019 2016 2019
INTERNATIONAL SELFCARE ONLINE REPORTING ON
TRANSFERS (CARD LIMIT) CARD FRAUD
(1) Q4 17 to Q1 19
DEEP DIVE 7 MAY 2019 27TOWARDS AN OMNI-CHANNEL BUSINESS MODEL
FEWER BRANCHES, MORE ADAPTED REMOTE PLATFORMS LEVERAGING ON SPECIALISED BACK OFFICES
# OFBRANCHES
ca.2,200 # OF BACK OFFICES
ca. 1,900
ca. 1,700 Multi-site 23
ca. 500 branches 20
ca. 1,200 Fully-operating
4 Customer Relation Centers 17 14
branches
2015 2018 2020 Enlarged scope of banking operations
More proactive calls, follow-up calls…
Client 2013 2017 2018 2020
Relationship
Centres
Various branch formats, Dedicated experts for specific issues
single or multi-site
ca. 13% OF CONSUMER CREDIT PRODUCTIONin
+ PRO centers Targeting 14 back offices specialised by market
Branch network PRO corners Q1 19
covering all client + Individuals vs. Professionals and corporates
Business centers
segments for Corporates Expert platforms for complex home loans,
inheritance…
DESIGN THINKING APPROACH to redefine client Leveraging on artificial intelligence: 300k
experience in branches with a focus on expertise documents directly recognised using A.I,facial
vs. autonomy for day-to-day operations biometry
NO MORE « ONE SIZE FITS ALL » branches
DEDICATED SET UP FOR EXPERTISE
DEEP DIVE 7 MAY 2019 28CREDIT DU NORD
REGIONAL BANKS WITH LOCAL AGILITY, FOCUSED ON
ENTREPRENEURS
HISTORICAL REGIONAL BANKS WITH STRONG CHARACTERISTICS FOCUSED ON CORE CLIENTS
DEDICATED TO LOCAL SUCCESSFUL GROWTH FOR OUR CORE
ENTREPRENEURS ca.18%(2) of penetration rate
CLIENTS (VAR 2014 – 2018)*:
for Corporate clients in France
CLIENT SATISFACTION DRIVEN
EXTENSIVE REGIONALROOTS ca.9.5%(3) of revenue market +10% for Professionals
share for Professional clients in +8% for Corporates
France
ca. 60% +10% for Premium clients
of global revenues generated by 70% of Professionals also have
Professional and Corporate clients their personal accounts
THROUGH AN ADAPTED RELATIONAL MODEL
Client Satisfaction is an essential ADAPTED BRANCHES
component of our DNA (1) FORMAT
FULLY DIGITALISED
#2 #3 #2 CLIENT JOURNEY FOR
for Corporates for Professionals for Retail clients NOMADBANKERS DAILYBANKING
& SPECIFICADVISORS
Agile Organisation with only 3 hierarchical levels between an account
manager and the Head of Credit du Nord MULTI MEDIA
SELF-SERVICE AREA
Source: (1) 2018 CSA Institute / (2) KANTAR survey / (3) Exton Survey EXPERTCENTER
* Variation in number of core clients
DEEP DIVE 7 MAY 2019 30COMMITTED TO A “CLIENT-DRIVEN” TRANSFORMATION
BETTER KNOW OUR CLIENTS BETTER IDENTIFY THEIR NEEDS BETTER SERVE THEM
THANKS TO NEW BEHAVIOURALPROFILING REFLECTEDTHROUGH 28CLEARLY IDENTIFIED THANKS TO AN OPEN ARCHITECTURE MODEL
BASED ON AI & BIG DATA APPROACHES CLIENTNEEDS -THE CDN PLATFORM-
INTERNAL CREDIT DU
NORD PRODUCTS AND
SERVICES
Digital SYNERGIES WITH THE GROUP
Secondary Family with PAYMENT
bank children
INSURANCE CIB CAR LEASE OFFER
WITH ALD
REAL ESTATE PRIVATE
SOLUTION BANKING
Need for strong support
(high cost) Foreign travel
CONSUMER
EXTERNAL FACTORING OFFER FINANCE
PARTNERSHIPS WITH CGA Specific credit
PARTNERSHIPS insurance dedicated to
FINTECH & INSURANCE OXATIS medical professions
Students Personal website creation
protection
PAYZEN & HIPAY
Web payment solution EXPENSYA
Expenses reporting
FIZEN solution
Aggressive Financial Control offer for
Price-sensitive investors very small enterprises
Big spenders
11 PRIORITY SEGMENTS OTHER SEGMENTS
TO BE ENHANCED WITH BEING EXAMINED MORE THAN 100 SIGNED PARTNERSHIPS UP TO NOW
NEW SERVICES
DEEP DIVE 7 MAY 2019 31BOURSORAMA
THE UNDISPUTED FRENCH ONLINE LEADER
THE LEADING ONLINE BANK IN FRANCE ACCELERATING CLIENT ACQUISITION
2018 ACQUISITION ( THOUSANDS OF CLIENTS) # of clients ca. + 30% CAGR2015-2018 , x2.2 in 3 years
ca.3% yearly churn rate
# of clients RECORD CLIENT ACQUISITION in April 19
PEER 1
LEADER
PEER 2 with >53K new clients >2M CLIENTS
PEER 3 1 YEAR EARLIER
# MILLION CLIENTS - EOY
THAN PLANNED
PEER 4
NEOBANK
ONLINEBANKS
PEER 6
PEER 5 PEER 7 PEER 9
PEER 8
PEER 10
# OF CLIENTS END OF
#1 in number of clients : ca. 1.8M clients as of April 19 2018(MILLION CLIENTS)
#1 in new clients acquisition : +465K new clients over the last HIGH POTENTIAL CLIENTS
12 months
38 years old on average Penetration rate(3)
#1 in notoriety : 1st top of mind among online banks(1) 50% have been clients for less than 2 6% of 30-somethings
ca.30% market share in online banking (2) years 8% of Parisians
Large proportion of managers (35%) 14% of French managers
Capturing ca. 8% of banking mobility in France(4)
Mainly city dwellers (70%)
(1) SmartTest D2D April 2019 (2) Based on ACPR September 2018 study (3) Based on INSEE data (4) Arcane research and Internal Data
Sources: press, companies, ACPR, internal data
DEEP DIVE 7 MAY 2019 33A FULL-SERVICE BANKING MODEL
A FULL-SERVICE BANKING MODEL ACTIVE AND EQUIPED CLIENTS
A SIMPLE BUT COMPREHENSIVEOFFER (30 PRODUCTS)
+ 48% YOY(3)
DEPOSITS EUR 5 BN (1) CONSUMER CREDIT EUR 0.9 BN (1) + 47% YOY(3)
+ 38% YOY(4) + 30% YOY (3)
+26% +9% +108% +6%
CAGR 15-18 CAGR 15-18
CAGR 15-18 CAGR 15-18
MARKET(2) MARKET (2) WEB & APPLI CARD TOTAL
CONNECTIONS TRANSACTIONS/ SUBSCRIP # OF CLIENTS
/ MONTH MONTH TIONS / MONTH
SAVINGS EUR 5.1 BN (1) MORTGAGES EUR 6.4 BN (1)
18M(3) 18M(3) 180K(3)
+24% +5% +23% +5% FIRST QUARTERS WITH BOURSORAMA FOR A NEW CLIENT
CAGR 15-18 CAGR 15-18 CAGR 15-18 CAGR 15-18
MARKET (2) OUTSTANDING DEPOSITS TREND(5)
MARKET (2) ca. x4 in 18 months
Consistent trend since
LIFE INSURANCE EUR 5BN (1)
SECURITIES & MUTUAL FUND EUR 4.6 BN (1)
2011
+10% +2% +1%
CAGR 15-18 CAGR 15-18 CAGR 15-18
MARKET (2) NEW CLIENT
AUA / CLIENT CA. EUR 12 000 & LOANS / CLIENT CA. EUR 4 500 (1)
(1) As of December 2018 and including all recent clients at that date (2) Source Banque de France, Boursorama (3) As of March 2019 and including all recent clients, YoY: from March 2018 to March 2019 (4) From December 2017 to December 2018
(5) Average outstandings of a new client (deposits and regulated savings) rebased on 100
DEEP DIVE 7 MAY 2019 34A SUCCESS BASED ON SINGLE MODEL FOCUSED
ON CUSTOMER AUTONOMY
A FULL DIGITAL AND AUTOMATED
MODEL
. A full online offer, with 0 paper
. 850 functionalities & services
. More than 100 types of notifications / alerts
. Continuous automation
EFFICIENT COST BASE CUSTOMER SATISFACTION CUSTOMER AUTONOMY A CUSTOMER SERVICE
ALLOWING AGGRESSIVE #1 in France - NPS > + 40 (1) DESIGNED TO PROCESS
< 1.4 contacts / year
PRICING Recommendation rate(2) per client with client service
EXCEPTIONS
. More than 2300 clients per employee
. +800K clients since end 2016 (+80%) vs. +80 staff >90% fuelling > 50% of new clients . No branches
(+10%) . Chatbot answering mostquestions
. #1 in pricing : Least expensive Bank for the last LEVERAGING ON OPEN BANKING . Human advisors available 6/7 until 10pm
11 years TO PROPOSE THE BEST OFFERS
. Acquisitionpartners
. Best services
. Best products
. Bestcontents
#1 economic and financial website in France with
>32M visits per month (3)
Towards traditional banks STRONG DIFFERENTIATION Towards neobanks through the
through pricing power comprehensive offer
(1) Source Opinionway, (2) Source Boursorama (3) ACPM-OJD March 2019
DEEP DIVE 7 MAY 2019 35A FLEXIBLE MODEL INTRINSICALLY PROFITABLE
BOURSORAMA FRANCE
153 REVENUES
2018 ACTUAL VIEW (EUR M) THEORETICAL VIEW: NO CLIENT EXCLUDING COMMERCIAL OFFERS
ACQUISITION (EUR M)
220 +458 K CLIENTS 220 +13% CAGR
Commercial
offers
>14% RONE 2016 2017 2018
under standard method
153 OPERATING COSTS
EXCLUDING DIRECT ACQUISITION COSTS
+5% CAGR
OPERATING
INCOME NET
-157 -16 INCOME
NETCOST
47
OPERATING NET 47
OF RISK INCOME INCOME 31 2016 2017 2018
-157
Direct OPERATING NETCOST INVESTMENT IN CLIENT ACQUISITION*
REVENUES
acquisition -52 -35 EXPENSES OF RISK
costs
-190 -16 EXCLUDING INVESTMENT IN CLIENT ACQUISITION* INVESTMENT IN CLIENT
REVENUES OPERATING ACQUISITION* BY 8%
EXPENSES FIXEDCOSTS
CLIENT
Modular, Variable and Efficient model -19% BETWEEN 2017 92%
AND 2018 VARIABLECOSTS
* Including commercial offers recognized in revenues and direct acquisition costs recognized in operating expenses
DEEP DIVE 7 MAY 2019 36TARGETING >3M CLIENTS BY 2021
# clients >3M PHASE 1
CLIENTS
Focus on CLIENT ACQUISITION to reach
adequate scale within the French retail market
>2M and to confirm our LEADERSHIP POSITION IN
CLIENTS
ONLINE BANKING
TARGET >3M CLIENTS IN 2021
0.8M
CLIENTS
PHASE 2
IMPROVED PROFITABILITY
2015 2019
Post acquisition phase, mid term RONE
2021
between 20% and 25% (IRBA method)
DEEP DIVE 7 MAY 2019 37DEEP DIVE INTO GLOBAL BANKING AND INVESTOR SOLUTIONS
RECOGNISED LEADERSHIP IN GROWING SEGMENTS
STRUCTURAL MARKET-LEADING
GROWTH DRIVERS EXPERTISE
SAVING FOR RETIREMENT GLOBAL LEADER IN INVESTMENT PRODUCTS
45
40 STRUCTURED PRODUCTS “Societe Generale is, by far, our most efficient
Global retirement savings US$ trillion
35
(OECD)
HOUSE OF THE YEAR counterpart for Structured Products”
30 (RISK MAGAZINE)
Structured Products Specialist at a Tier 1 European Private Bank
25
2012 2014 2016
INFRASTRUCTURE AND ENERGY TRANSITION NEEDS GLOBAL LEADER IN STRUCTURED FINANCE
5
GLOBAL PROJECT
“Societe Generale's speed of execution as well as its
4 Annual Infrastructure Investment, Current
3 Trends US$ Trillion FINANCE ADVISOR OF significant knowledge in the fibre space was
2
(Global Infrastructure Hub) THE YEAR instrumental...”
1 (PFI)
2007 2017 2027 2037 German Telco CFO
NEEDS OF MULTINATIONAL AND EXPORTING CORPORATES REGIONAL LEADER IN TRANSACTION BANKING
1000 “Societe Generale’s expertise, innovation spirit and
Volume of global exports, 1980 = 100 LEADER IN EMEA
500 (IMF)
daily customer service has been essential for the
setup of our global payment & reporting factory
0
1980 1991 2002 2013 2024 across CEEMEA”
Luxury Goods Company
DEEP DIVE 7 MAY 2019 39LEVERAGING ON LONG TERM CLIENT RELATIONSHIPS
_WHOLESALE CLIENT REVENUES (EUR BN) FOCUS ON CLIENT SELECTIVITY AND CLIENT
48% OF REVENUES WITH CORPORATES PROFITABILITY
52% WITH FINANCIAL INSTITUTIONS
8.5 800 Strategic Clients: 55% of total client
8.1
7.0 revenues
25%
NPS constantly improving with both
28%
corporate clients and financial institutions
More than 70% of Strategic Client revenues
47% is from clients that work with us in 3 or
more regions*
2014 2016 2018
Global Banking & Advisory Transaction banking, ALD,
Equipment finance, Retail, Other
Global Markets and Investor Solutions
*Western Europe, Americas, CEEMEA, Asia-Pacific
DEEP DIVE 7 MAY 2019 40AN INTERCONNECTED MODEL FOR OUR CLIENTS
Americas Asia, Pacific & Other
17% 15%
of 2018 of 2018
revenues EMEA revenues
STRONG POSITIONS IN 68% CONNECTING ASIA TO THE
of 2018
TARGETED SEGMENTS revenues
WORLD
Top foreign bank in Equity Derivatives & leading
position in Structured Finance Financial Institutions: focused on distribution of
investment solutions to private banks.
LEADERSHIP POSITION IN CIB
SUCCESSFUL GROWING
CORPORATE CLIENT BASE Corporates: increased penetration with EMEA
World leader in Equity derivatives
clients
21%
World leader in Structured Finance
EMEA leader in Investment Banking
17%
of Asia Pacific &
of Americas
revenues with
EMEA leader in Transaction Banking other revenues
with European
European French Leader in Private Banking clients
clients
DEEP DIVE 7 MAY 2019 41ALLOCATING CAPITAL TO MOST RELEVANT FRANCHISES
% OF 2018 SYNERGIES 2020 ROADMAP:
2018 RWAs RETURN STRATEGIC PRIORITIES
GLOBAL MARKETS INVESTMENT SOLUTIONS ~15% 10-15% STRENGTHEN LEADERSHIP
AND INVESTOR PROMOTE CROSS-ASSET AND
FINANCING ~10% > 15% INNOVATIVE SOLUTIONS
SERVICES
FLOW* ~25% < 5% RESTRUCTURE
STRUCTURED & ASSET FINANCE,
FINANCING &
INVESTMENT BANKING, ~30% > 15% GROW
TRANSACTION BANKING
ADVISORY
CORPORATE LENDING ~10% < 5% INCREASE SELECTIVITY
WEALTH & ASSET ~10% < 5%
GROW PRIVATE BANKING IN
FRANCE
MANAGEMENT AND ETFs
VERY HIGH GOOD LEVEL FEWER
*Including Securities Services
LEVEL OF OF SYNERGIES SYNERGIES
SYNERGIES
DEEP DIVE 7 MAY 2019 42REFOCUSING ON CORE EXPERTISE IN GLOBAL MARKETS
OUR STRATEGY IN GLOBAL CONCENTRATE RESOURCES EUR 8 BN RWA REDUCTION
MARKETS IS BASED ON ON MOST PROFITABLE 2020 TARGET*
THREE FRANCHISES ACTIVITIES & RESTRUCTURE
FLOW
STRENGTHEN LEADERSHIP IN
CROSS-ASSET INVESTMENT
SOLUTIONS Closure of OTC commodities
INCREASE EXECUTION Closure of Descartesproprietary trading FLOW
CAPABILITIES IN FINANCING 80% PRODUCTS
Increase client selectivity in Prime Services
OPTIMISE FLOW PRODUCTS Downsize Fixed Income and Currencies
LEVERAGING ON GROUP
CORPORATE FRANCHISE
EUR 2.3 BN ACHIEVED IN
Q1 19
* At constant regulatory environment
DEEP DIVE 7 MAY 2019 43ADJUSTING THE COST BASE
STRATEGIC ACTIONS % OF EUR 500M additional savings plan
GLOBAL MARKETS AND INVESTORSERVICES INTERNAL Business closures,
STAFF optimisation of IT budget, 69%
Global Markets: business closures and staff reduction,
automation and offshoring
mainly in FICC
Securities Services: exit from wealth management
GLOBAL MARKETS &
EXTERNAL IT Business closures, fewer
services and clearing in the UK
AND SUPPORT external contractors, 15% 76% INVESTOR SERVICES
FINANCING & ADVISORY STAFF automation
Merger of Global Finance, Coverage and Investment
Banking Consultants, legal fees,
OTHER COSTS marketing, travel, market 16%
ASSET & WEALTH MANAGEMENT data FINANCING &
Restructure private banking headquarters 14% ADVISORY
EUR 250-300M RESTRUCTURING COST IN 2019 ASSET &
GLOBAL REORGANISATION
10% WEALTH MANAGEMENT
OF IT AND OPERATIONS
DEEP DIVE 7 MAY 2019 44REACHING OUR 11.5%-12.5% 2020 RONE TARGET
2020 REVENUES > 2018
2020 COST OF RISK ~20 bps
REVENUES
REDUCING COSTS FROM 2020 RWAs ~ 2018 RWAs
EUR 7.2BN IN 2018 TO EUR including TRIM mostly impacting
6.8BN IN 2020 Global Markets
_RETURN ON NORMATIVE EQUITY* (%)
14.7%
2020 Target
11.2% 11.5% 11.5% - 12.5%
10.8% 10.6%
7.8%
2013 2014 2015 2016 2017 2018 2020
*Adjusted for regulatory fines in 2013 and in 2016 (EURIBOR fine and partial reimbursement)
2013 and 2014 as published in 2014, 2015 and 2016 as published in 2016, 2017 and 2018 as published in 2018
DEEP DIVE 7 MAY 2019 45OUR VISION: A RELATIONSHIP, PIONEER AND
RESPONSIBLE BANK
INTEGRATED GLOBAL EXPERTISE AND INNOVATION POSITIVE
PRESENCE IMPACT
Serving the sophisticated needs of our clients is
Europe is our domestic market part of our DNA Leadership in renewables
US and Asia are dynamic markets where we Creating new investment and structured finance
solutions Investment products and
are growing our presence positive impact finance
Africa is a differentiating factor
PROFITABILITY ABOVE COST A WHOLESALE B2B MARKETPLACE
OF CAPITAL
SG Markets: one interface for clients and teams
Selective capital allocation Successful partnerships
Focused on areas of strength New services and features at a lower cost
Adapted to a new regulatory environment Best in class client experience
(capacity to limit FRTB impact)
DEEP DIVE 7 MAY 2019 4647
GLOBAL MARKETS
GLOBAL MARKETS FOOTPRINT: A POWERFUL CROSS
ASSET DERIVATIVES & SOLUTIONS HOUSE
INVESTMENT SOLUTIONS
(30%)
Structured Products
FICC Equities
FLOW & HEDGING SOLUTIONS
Warrants/Certificate (50%)
Proprietary Indices Liquidity provider on cash assets and
Equities derivatives
3 “PRODUCT” PILLARS Leading execution and clearing broker
in Listed Derivatives
FINANCING SOLUTIONS FICC
(20%) FICC
High velocity collateral trading Equities
Structured Financing
FINANCIAL INSTITUTIONS CORPORATES RETAIL INVESTORS
62% 19% 19%
ALM, hedging and financing solutions for own Holistic risk management & Investment solutions design for third-
account hedging solutions party distribution to retail investors
OUR CLIENTS INVESTMENT
INVESTMENT
11%
14%
FINANCING INVESTMENT
9% 100%
FLOW &
HEDGING 62% FINANCING
24% FLOW &
HEDGING 80%
DEEP DIVE 7 MAY 2019 49INVESTMENT SOLUTIONS: CORE ACTIVITY, LEADING
POSITION
WHATWEDO: WE SOLVE CLIENT COMPLEXITY TO PROVIDE INVESTMENT SOLUTIONS TARGETING ENHANCED RETURN
INVESTMENT PRODUCTS OUR AMBITION:
Structured products: High client demand for Autocall structures, leading innovation on underlying asset
design, diversification towards rates and credit products MAINTAIN OUR LEADERSHIP IN
Warrants and certificates: Leading player in Asia, breakthrough in Germany with the acquisition of EMC INVESTMENT SOLUTIONS
activities
INVESTMENT DERIVATIVES STRATEGIC ACTION:
Societe Generale’s risk exposure generated by Investment Products turned to opportunities for EMC ACQUISITION
sophisticated clients
Key risks offset: >70% of quanto and index correlation risk, 50% of credit recovery sensitivity OUTLOOK
+ High demand for
INVESTMENT STRATEGIES investmentproducts
Quantitative Index Strategies: Systematic strategies for institutional clients with proven low volatility + Push on Quantitative Index Strat
and superior return over the medium term. Generate no market risk and low Balance Sheet consumption
- Risk appetite and market shocks
Custom Fixed Index Annuity Strategies: Designed for US insurers’ fixed index annuity activity
- Market concentration in some product
areas
DEEP DIVE 7 MAY 2019 50FINANCING SOLUTIONS: RECURRENT REVENUES AND
RWA LIGHT
WHATWEDO: WE LEVERAGE OUR CROSS-ASSET CAPABILITIES TO MONETISE OUR ALLOCATED BALANCE SHEET
OUR AMBITION:
FLOW FINANCING
Continued presence to facilitate client needs in OFFER BEST IN CLASS SOLUTIONS
Traditional Repo and Secured loans capabilities on all liquid assets (G10 Govies, Equities, Convertibles, FOR OUR CLIENTS
Credit and EM Credit)
Growth on STRATEGIC ACTION:
Synthetic prime brokerage: Total Return Swaps / Dynamic Portfolio Swaps activity
FURTHER PROMOTE CROSS-
Collateral Exchange: Client need since new Capital Requirement Regulation. Requires cross-asset trading
capabilities ASSET AND INNOVATIVE
Cutting edge IT Investments underway SOLUTIONS
STRUCTURED FINANCING OUTLOOK
+ Additional eligible collateral and
Sophisticated assets & maturities: Large suite of eligible assets, under expansion (Private Equity, Life structures
Settlement, Single HF shares, emerging market assets) + Regulation
Tailor-made solutions to meet new client needs driven by regulation
- Abundant liquidity leading to spread
compression
DEEP DIVE 7 MAY 2019 51FLOW AND HEDGING SOLUTIONS: FOCUSED AMBITION
WHAT WE DO: WE PROVIDE ADDED VALUE CONTENT, DIGITAL SERVICES & QUANTITATIVE TRADING CAPABILITIES
CASH PRODUCTS OUR AMBITION:
Support ECM and DCM franchises A SYNERGETIC BACKBONE
Work on efficiency FOCUSED ON AREAS OF EXPERTISE
CLEARING AND LISTED PRODUCT EXECUTION
STRATEGIC ACTION:
Leading execution and clearing broker in Listed Derivatives
Adjustments to reduce capital consumption while preserving the franchise GROW CONTENT DRIVEN FLOW
DERIVATIVES
OUTLOOK
Equity derivatives: A worldwide franchise based on innovative content and advisory and our ability to
+ Strong appetite for content
execute very large transactions in liquid and illiquid markets
Fixed income: Leveraging our leading corporate franchise on EUR Rates and our Emerging Markets - Extended period of low volatility
presence to act as a premium additional liquidity provider on FX and Rates (CEE, Africa) - Increased competition, in particular on
corporates clients
DEEP DIVE 7 MAY 2019 52FINANCING AND ADVISORY
DIVERSIFIED FINANCING AND ADVISORY SOLUTIONS
SERVING THE NEEDS OF WHOLESALE CLIENTS
REVENUES BY REGION REVENUES BY BUSINESS REVENUES BY CLIENT TYPE
Recognized industry
knowledge thanks to a
long-standing presence
in core markets
First-class expertise in
structured finance
Global approach of the
financing markets
. Worldwide footprint
businesses
. From capital markets to
banking markets
Strong risk awareness
DEEP DIVE 7 MAY 2019 54DELIVERING OUR BUSINESS INITIATIVES TO BRING
MORE VALUE TO OUR CLIENTS
GLOBAL BANKING & ADVISORY REVENUES BUSINESS PUSHES DELIVERING
_NBI in MEUR
2,293
2,264 2,273 NBI CAGR
2,180
1,980 2016-2018
1,744 9%
Asset finance
Asset-backedproducts 19%
Renewable finance x2
2013 2014 2015 2016 2017 2018
SOURCE FY2017 FY2018
Global Securitisation in euros IFR #2 #1
8.7% mkt share 10.1% mkt share
Real Estate Finance in EMEA (volume by MLA) Dealogic #5 #2
GAINING MARKET SHARE 4.8% mkt share 8.2% mkt share
IN MOST MARKETS Global Project Finance by Financial Advisor PFI #11 #1
EMEA Project Finance by MLA PFI #5 #2
All International Euro-denominated bonds IFR #4 #3
5.9% mkt share 6% mkt share
DEEP DIVE 7 MAY 2019 55INCREASED TRANSACTION BANKING MARKET SHARE
IN WESTERN EUROPE
GROUP REVENUES FROM GLOBAL TRANSACTION ADVANTAGES FOR THE GROUP
BANKING*
EUR 2.0bn
EUR 1.9bn + Client proximity helps to cross-sell all
EUR 1.6bn
Group products
+ Stable revenue base
+ Accretive
2013 2016 2018
NBI growth & market share gains in cash management in Western Europe – double digit volume growth
From #10 to #7 ranking in Western Europe for Payment and Cash Management (Source: Euromoney)
Investments ongoing to complete a pan-European product suite in line with highest standards
Leveraging synergies with SG clients worldwide
*Management data
DEEP DIVE 7 MAY 2019 56ACTIVE CAPITAL MANAGEMENT BASED ON AN
EFFICIENT OTD MODEL
A STRONG CAPITAL MARKETS APPROACH AND ACTIVE PORTFOLIO MANAGEMENT TO SUCCEED IN AN
INCREASINGLY DISINTERMEDIATED MARKET
FINANCING BUSINESSES*: CREDIT RISK RWA AND NBI/AVERAGE CREDIT RISK RWA FINANCING BUSINESSES*: NEW PRODUCTION AND PRIMARY DISTRIBUTION (EURm)
Primary New
55,000 5.0% distribution production
50,000 100,000
45,000 4.0%
40,000
35,000 3.0% 75,000
30,000
25,000 2.0% 50,000
2015 2016 2017 2018 20,000
Credit Risk RWA (EURm) NBI/Average Credit Risk RWA 25,000
10,000
- -
FINANCING BUSINESSES*: PORTFOLIO MANAGEMENT ACTIONS (EUR M) 2015 2016 2017 2018
Nominal Primary distribution New production (excl. Short Term financing)
15,000
10,000 FEES: 49% OF 2018 REVENUES
5,000
A FEE-DRIVEN MODEL BASED ON
2015 2016 2017 2018 STRONG ADVISORY CAPABILITIES
Derisking (Insurance, CDS, 1st loss) Secondary sales
*Financing businesses: F&A excluding GTB and JVs on market activities
DEEP DIVE 7 MAY 2019 57STRONG RISK MANAGEMENT TRACK RECORD
AVERAGE NET 1,000
COST OF RISK F&A NCR (EUR m) Expected Loss Q4 2018
800
BELOW Average Net Cost of Risk (2006-2018)
EXPECTED LOSS 600
OF THE 400
PORTFOLIO
200
-
(200)
(400)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NET COST 300
OF RISK OF
COMMODITY 200
FINANCE AND 100
LEVERAGE
FINANCE SINCE -
2006 (in MEUR)
(100) Commodities Leverage
(200)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
DEEP DIVE 7 MAY 2019 58DISCLAIMER
This presentation contains forward-looking statements relating to the targets and strategies of the Societe Generale Group. These forward-
looking statements are based on a series of assumptions, both general and specific, in particular the application of accounting principles and
methods in accordance with IFRS (International Financial Reporting Standards) as adopted in the European Union, as well as the application of
existing prudential regulations. These forward-looking statements have also been developed from scenarios based on a number of economic
assumptionsinthecontextofagivencompetitiveandregulatoryenvironment. The Groupmaybeunableto:- anticipatealltherisks, uncertainties
or other factors likely to affect its business and to appraise their potential consequences; - evaluate the extent to which the occurrence of a risk
or a combination of risks could cause actual results to differ materially from those provided in this document and the related presentation.
Therefore, although Societe Generale believes that these statements are based on reasonable assumptions, these forward-looking statements
are subject to numerous risks and uncertainties, including matters not yet known to it or its management or not currently considered material,
and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that
could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among others, overall
trends in general economic activity and in Societe Generale’s markets in particular, regulatory and prudential changes, and the success of Societe
Generale’s strategic, operating and financial initiatives. More detailed information on the potential risks that could affect Societe Generale’s
financial results can be found in the Registration Document filed with the French Autorité des Marchés Financiers. Investors are advised to take
into account factors of uncertainty and risk likely to impact the operations of the Group when considering the information contained in such
forward-looking statements. Other than as required by applicable law, Societe Generale does not undertake any obligation to update or revise
any forward-looking information or statements. Unless otherwise specified, the sources for the business rankings and market positions are
internal. Figures in this presentation are unaudited.
DEEP DIVE 7 MAY 2019 59You can also read
